1. Integrated Energy Efficiency Management
Driving results through integrated systems & cultural change
Chistopher Smith
Global Practice Leader
CIS Sustainable Energy Forum
June 2, 2011

2. Topics Energy Efficiency Approach
Key Sustainability & Energy Efficiency “Drivers”
Proven Energy Efficiency Methods & Approaches
Energy Efficiency Results
In the next few minutes I’ll:
describe how DuPont approaches energy efficiency
share our understanding of Russia’s energy challenges
outline the global and regional key trends and conditions that are driving the need for energy efficiency
discuss proven methods and approaches to energy efficiency
and share some results

3. Corporate Approach to Strategic Issues
Recognize strategic value & drive from the top
Line accountability
Appropriate support resources
Integrated Management System
Consistent implementation approach across entire operations portfolio
Rigorous performance management
Prioritize no-capital & low-capital improvement

4. Simplified Energy Cost Flow
Sourcing
Efficiency
Energy cost is a function of pricing, consumption, GHG credits/options, and incentives
Pricing is driven by market dynamics, but is negotiable
Efficiency efforts are focused on minimizing waste
Improvements to efficiency:
Core Technology, capital-driven
Energy System improvements, low capital/cost
Changing behaviors – minimal investment
Core Manufacturing Process
Energy Input
Improvements…
Modifications to core technology, mostly capital investment driven (new technologies, heat integration, etc)
Improvements to the energy systems, low capital/cost investment (ie pump efficiency)
Changing the behaviors to operate with discipline around reducing energy waste, minimal investment
Energy Systems
Energy Source Mix
Energy Pricing
Energy Culture
Energy Waste

5. External Drivers are pressuring companies to improve Energy Efficiency
Volatility, magnitude and escalation of energy costs are increasing the urgency to drive improvements in energy efficiency.
1. Volatility of resource costs
Governments and global institutions are introducing new energy management regulations and policies, pressuring companies & societies to re-think energy consumption.
2. Public policy
The Investment community is increasing the weight of a company’s energy efficiency commitments and capabilities when making investment choices.
3. Access to capital
These are the key drivers that are pressuring companies around the world to improve their energy position.
Of the five drivers, four seem particularly relevant to the objectives in Russia.
Let’s start with volatility of resource costs and public policy. According to the June 2010 wiiw report, the government’s intent is to increase oil production exports by 10% and gas exports by 40%, while constraining domestic gas consumption through tariff hikes. Russia must free up energy carriers for export to keep its domestic energy costs low. Reducing energy consumption is critical to achieving this. Behavioral changes will take the form of tightening technical energy requirements for various types of equipment to increase efficiencies and (over time) moving energy users from gas to coal and nuclear through increased tariffs. [KEY CONNECTIONS: NEEDED MANAGEMENT SYSTEMS, PRIORIZATION OF INITIATIVES, CULTURAL CHANGE MODELS]
Improvements in energy efficiency will require facility, equipment and infrastructure upgrades which, in turn requires attracting increased investment. Investors will be more willing to invest if companies can show that they can be more responsible and capable of reducing their energy consumptions and controlling their costs. And finally, reduced energy demand will lower the cost of goods which increases the region’s competitiveness. [KEY CONNECTIONS: SELECTING HIGH GAIN LOWEST COST INITIATIVES, QUICK WINS THAT CAN BE SHOWCASED TO ESTABLISH TRUST, GOOD WILL AND ATTRACT INVESTMENTS, LOWER CONSUMPTIONS LEADING TO LOWER COSTS TO BETTER COMPETE]
It’s clear that Russia’s economic success relies on reducing energy intensity across its economy. Based on Russia’s Energy Strategy, a large portion of the reductions will need to come from energy intensive industry. The reductions in these industries are expected to come from both capital projects requiring increased investments as well as no, or low capital initiatives. A combination of energy policy, technology and behavioral solutions will be needed to achieve the aggressive goals set forth in the Energy Plan.
ADDITIONAL
[Access to Capital: The ‘Energy Strategy until 2030’ (approved Aug. 2009), which appears to be in line with the government’s announced programme of modernization and innovation will require significant investment. Investment needed for the development of oil and gas deposits alone is estimated at 1 – 3 Trillion USD through When combined with investments in infrastructure upgrades, the need goes well beyond the current investment trajectory.]
[BACKGROUND FROM wiiw Report: The prospects of the Russian energy sector are to be seen against the background of the government’s plans to reduce the energy intensity of economy. The idea behind it is to boost the international competitiveness of Russian products (particularly in the energy-intensive industrial branches) and to free up additional volumes of energy carriers for exports. Indeed, despite the recent impressive progress Russia still has one of the most energy-intensive economies in the world. As demonstrated by Figure 11, in order to produce one unit of GDP, the Russian economy consumes twice as much energy as the United States or the world on average, and three times as much as e.g. Austria or the EU -27. This is partly a consequence of using the old Soviet-era energy-intensive technologies, but also reflects the structural backwardness and the energy-wasting behaviour of economic agents.]
[The government’s target is to increase, by the year 2030, oil production by 10% and gas production by some 40%, with half of the latter to be provided by the so-called ‘independent’ (from Gazprom) producers. The increase in the oil output would be largely channelled to domestic consumption, while crude exports should stay flat and those of oil products rise only marginally. At the same time, the planned tax reforms should facilitate a shift in the structure of the Russian energy export mix away from crude oil towards higher value-added oil products. In contrast to oil, half of the additionally produced gas should be exported: gas exports are to rise by about 50%. In turn, the rise in domestic gas consumption will be constrained by the planned tariff hikes, which should facilitate the substitution of gas by coal and nuclear energy, and induce energy-saving behaviour. The announced target is to lower the energy intensity of the economy by about three times and bring it close to the levels observed in developed countries with similar climatic conditions. Domestic gas savings resulting from higher energy efficiency, but also reduced flaring and leakages.]
Companies are expected to publish energy improvement goals and are being held accountable for delivering results.
4. Public accountability
Energy efficiency is being used as a powerful strategy to lower the cost of goods and attract customers at every level.
5. Competition

6. The DuPont Energy Challenges
DuPont has addressed similar energy challenges on a continuous basis since 1989
Our motivations:
Recognized energy cost is a significant part of our total operating cost
Experienced supply disruptions and cost was increasing rapidly
Energy efficiency would provide the greatest cost savings among global warming initiatives
Saw this as a way to outperform competitors
Overall, the health and welfare of the organization and its product lines would be at risk if we didn’t act.

7. Achieving cost reductions and security of supply through efficiency and improved operating team capabilities
Energy Efficiency
Rooting effective energy management system in leadership enablement, clear organizational goals, effective staffing and training, and specific processes and actions
Integrating energy efficiency management into the strategy and execution of the ongoing business processes (capital, cost, resources, etc.)
Designing a practical and enduring energy management process to sustain and build on achieved goals – customized at each level of the organization
Emissions
Resources
Supply Chain
Energy
People
Management
Culture
Achieving Energy Efficiency success requires a rigorous systems approach. The components of the system are strong leadership, an appropriate organizational structure that follows focused processes and actions.
At DuPont, we had strong Corporate Leadership at the Executive Level. A Senior V.P. sponsored our energy initiatives and appointed a corporate committee that had the power to develop a plan and guide change.
At the Business level, an Energy Champion is assigned to lead the Energy Center of Competence. The Champion developed the performance metrics. corporate and business level goals and defined and led the managing process.
The Staff Level is strongly linked to the business goals and managing processes
The Plant Level is staffed and trained to ensure that the right people with the right technical skills are capable of following the processes and executing the actions that will deliver energy savings.
Success relies on transforming the culture to understand, perform and deliver to the goals, objectives and metrics defined by the managing systems.
Quality
Reliability
Maintenance
Safety

8. Energy Planning Process
Recognize the
Energy Challenge
Develop an
Energy Plan
Energy Goals Workshop
Assess Process
Energy use
Identify
Opportunities
Develop
Capital Projects
Appropriate
Capital Funds
Internal
Capital
External Funds
(Performance
Contracting)
Energy Plan Template
Plant Energy Assessment Template
Energy-related Six Sigma Projects Virtual Workshops
“Top Ten” Energy Projects Initiative
The strength of our methodologies lies in the ability to communicate and operationalize a strong set of process phases and steps. These have been customized to hundreds of different operations across DuPont. The approach has been tested, fine tuned and proven in a variety of situations.
Briefly describe process steps and outcomes.

9. DuPont Sustainability Results
Goal
achieve 5% ($50 Million USD) annual decrease in energy use, consistent with sustainability goals
DuPont Results
19% decrease in energy use
20% increase in production
$5B in cost savings
* TRI = Toxic Release Inventory Sources: DuPont Global Reporting Initiative (GRI) report, Yahoo Finance
DuPont Reduction
Air Carcinogens 92%
U.S. TRI* “Releases” 77%
Air Toxics 75%
Energy Efficiency Initiatives Examples
Integrated load controls
Utilize Vented H2 in CB Boiler
Improve Condensate Return
Reduce Liquid Nitrogen Usage
Steam Trap Maintenance
Cooling Tower Water Temperatures
Monitoring & Targeting
Mindset and Behaviors…
Energy
By implementing and integrating these rigorous management systems, DuPont has been able to realize outstanding results. (Call audiences attention to the significant decreases even in light of increasing production.
Additional successes… Industry recognition: “Laggard” to “Leader”
425th consecutive quarter dividend
Renewable energy saves more than $10 million per year
Waste reduced = product sold
Capitalizing on hidden capactiy saves millions in reduced and deferred investment
Greenhouse gas credits can be sold in carbon markets

10. Example: Oil & Gas Client
Project Objectives
Possible Results
Goal:
10% Energy Reduction by 2015
Objectives:
Leadership commitment and cultural change that leads to a sustainable corporate best practice Energy Management process
Performance management process and the metrics necessary for managing the activities and projects
Pilot of new Energy Management System at a Refinery
Estimated benefits from an Energy Efficiency Improvement Program
Without investment: 3 – 5%
With Capex <1000K$ 8 – 12%
With Capex >1000K$ 16 – 24%
World-Class Refineries consume ~25% less than average
Example of Oil and Gas client’s objectives, our actions and the anticipated results.

11. Example: Oil & Gas Approach
Corporate Energy Management System
Corporate & Site Assessment/Survey
Implementation Plan Development
Management System & KPI Development
The Oil and gas approach timelines and activity steps
Corporate Rollout Plan Development
Organizational Development & Training
Process Assessment & Continuous Improvement Plan
1/1/10
6/1/10
11/1/11

12. Example: Oil & Gas Approach
Corporate Energy Management System
Corporate & Site Assessment/Survey
Implementation Plan Development
Management System & KPI Development
Corporate Rollout Plan Development
Organizational Development & Training
Process Assessment & Continuous Improvement Plan
Site Pilot
Over $1.5 MM in direct benefit in less than 1 year
Corporate system designed for sustainability
Process, energy system, and culture opportunities identified and implemented
Energy Culture Survey
Technical Review
Management System Technical Assessment
Leadership Alignment
Solution Design
KPI Development
1/1/10
6/1/10
11/1/11

13. DuPont’s Energy Efficiency Approach
Driving performance results through integrated energy systems & cultural change
Identifying and elevating energy cost as a strategic business issue
Implementing a vertically integrated management approach to drive results
Developing skills and capabilities of people in the organization
Identifying and executing the right projects to drive highest gain results
Identifying and elevating energy cost as a strategic business issue
Understanding business implications of energy consumption and escalating costs
Understanding implications of energy cost variability on portfolio profitability
Benchmarking and quantifying the total opportunity value
Implementing a vertically integrated management approach to drive results
Driving leadership and management commitment to breakout performance
Instituting organizational structures and accountabilities to drive results
Designing and implementing managing processes to sustain results
Developing skills and capabilities of the people in the organization
Identifying and executing the right projects to drive highest gain results
Prioritizing highest gain / lowest investment opportunities
Utilizing leading methods for improvement opportunity execution (six sigma, lean, etc)
Bringing deep technical expertise, in both energy systems & core processes

14. Global Practice Leader
Christopher Smith
Global Practice Leader

15. May be used as the first two slides to introduce DuPont and DSS
Introductory Slides
May be used as the first two slides to introduce DuPont and DSS

16. Founded in 1802 DuPont A Fortune Top 100 Science Company
Recognized for experience and success in operational excellence
Active Leader in environmental sustainability since 1989 – “Laggard to Leader”
(Name, Title), I’m with DuPont -- a Fortune top 100 science company, recognized for their experience and success in operational management. DuPont has been a very active leader in environmental sustainability since In fact, we’ve developed rigorous managing systems that have allowed us to transform our organization from laggard to leader so much so that today, we are taking those systems and learnings to the marketplace in the form of consulting services.

17. DuPont Consulting, Technology, & Training Services:
DuPont Sustainable Solutions
Global Safety Consultants Since 1998*
Clean Technologies
Training Solutions
Sustainable Operations
Environment, Energy, Sustainable Assets
DuPont has developed a strong set of consulting, technology, and licensing services as part of its diverse portfolio. This is managed by our Sustainable Solutions business.
Our safety services are perhaps best known. We’ve been consulting in this space for over 35 years but the fact is, we’ve been building our knowledge, experience and managing systems in safety since our founding – over 200 years ago. These services have evolved from employee safety to include process safety and most recently, contractor safety.
Clean technologies (fill-in per audience’s interest)
Sustainable Operations focuses on Energy Efficiency, Environmental Management and Sustainable Assets. Our knowledge and practical practicality runs deep in these areas. The approaches, methodologies and managing systems that we’ve developed as owner/operators have allowed is to free up large amounts of capital and improve performance at multiple levels across our organization while increasing shareholder and stakeholder value.
Improve Performance, Release Capital…Increase Shareholder & Stakeholder Value
*Has existed as a safety services business since the early 1970's.